Gita Gopinath is Professor of Economics at Harvard University. She is a visiting scholar at the Federal Reserve Bank of Boston, a research associate at the National Bureau of Economic Research, and a World Economic Forum Young Global Leader.

A possible win for capital investment could be to use Net Domestic Product comparisons to show the relative outperformance of India based on this metric. It deducts depreciation based on the existing capital stock. The idea is, "Could it be used to win a lower cost of capital for India?"

Growth is not as expected because dreams are always highly fantastic but surely not disappointment. People are wise enough to understand the causes behind the slow speed of the progress. They have enough awareness about the role of Congress and Leftist in the country. Especially the role of the Left parties is always suspicious in democratic countries. Leftists are a globally frustrated group and so in India. They are now busy in magnifying the smaller incidents to the optimum presentation and thereby to defame the Modi government and the nation. But I think all these problems will end by the end of this year when Modi government will gain majority in the upper house.

I am not sure why a 7-8% growth is being portrayed repeatedly as a grand failure. Just finish the major reforms and all problems magically disappears approach has completely hypnotized not just common people but many intellectuals.
What is needed is consistency and long term vision and no more political recessions. When an institutional change like financial inclusion through large scale bank accounts opened, reading it out of context saying 50% or so empty accounts. Interpreting without showing complete picture is becoming much more harmful than real failures.

Walmart wanted to invest in India, but was largely rejected. If India wants to be a modern country, it needs to open up to foreign companies and investment, to eradicate state owned entities including banks, to end wasteful subsidies, and to ease licensing and the associated corruption.

What it will take is a strong leader who can make the case that economic freedom is more important than religion or tribalism, and to make it clear that India's socialism has killed hundreds of millions prematurely, and needs to be thrown completely off.

With her elevated understanding of India from a distance, the scholarly writer has like any other commentator/expert on India emphasized the need to "press ahead with the major reforms needed to remove the obstacles blocking India's progress". The very fact that a rightist party has been returned to power after a decade with an enviable majority on its own would have set afire the zeal of entrepreneurs/trading classes to sense opportunities for advancement instead of blandly expecting the government to do the spadework. The fact remains that Indian private sector captains had lost the appetite for risk and naturally the reward is not there for the picking. Knowing obstructionist politics continue to hold hostage the fortunes of the economy, it is time responsible private sector industries focused on their core competence to get the economy out of the rut or woods in their enlightened self-interests. No meaningful political change in a noisy democracy with least awareness of the quality of life among millions of people would do anything to retrieve the lost ground or the lost decades. India's bane had been its failure to focus on the nitty-gritty of primary health and primary education in a more purposeful fashion in the past and it is difficult to bypass basics to reap high hanging fruits of development!! g.srinivasan, journalist, new delhi

The trepidation that surfaces whenever The US Fed dangles an interest rate increase, is signaling latent black holes.
With Big Data in abundance, Emerging Markets no longer can hide behind "unknown knowns".
Dollarised liabilities lurking behind the Credit binge - needs to be addressed.
Rather than blaming it on Destiny - or First World alibi.
If the credit markets are hiding "unknown knowns" - as suggested by the author, analytics must highlight.

The Investment anaemia is reflecting a much deeper malaise.
The absence of a Coherent and compelling narrative - is the disconnect.
Between demand - never any shortage ever in Emerging markets - and the financial architecture, that cannot connect.
The reasons why The Dragon raced ahead of The Elephant - was the clarity with which they comprehended the limitations.
Bretton Woods was great - but the missing link between Value creation and Infrastructure Finance needed Mandarins with Masterminds.
Hence China's Development Banks now the Apple of all eyes - CDB, CIC, AIIB, NDB.
Without creating the Big Apples first, the leap to small Apples cannot happen.
Migration remains the World's largest Macroeconomic motor.
Rural Urban migration - China's template.
Cross border migration - America's template.

Gitaji can you elaborate - how many infrastructure projects are being held up due to land acquisition ?? cab you share your data !!

Out of the 804 projects, about 160 (almost 20%) are stalled due to “other” reasons, followed by 130 projects stalled for reasons not available.

Another popular reason cited for stalling of projects is lack of environmental clearances. However, only 33 projects, or about 4% of those stalled, were for environmental reasons.
Source: RTI response from Ministry of Finance

The legislative gridlock is likely to continue till the second half of 2016 when the BJP is likely to gain seats in the upper house Rajya Sabha so as to push through long delayed reforms. The administrative gridlock is primarily due to bureaucratic red tape. Inspite of the Govt. pressing for faster clearances & implementation, the wheels of Govt. do not seem to be picking pace. There have been reforms in power sector particularly renewable energy as also in the railways.
The depressed oil prices has been an unwitting Godsent gift but the Govt. needs to leverage this huge savings judiciously. Low commodity prices would normally benefit manufacturing sector. However, due to a deep malaise within this sector, not much benefit is being accrued. Since private investment has lagged behind, the Govt. has increased public spending to boost the economy. Whether this increased spend will translate into GDP growth is anyone's guess. The Govt. ought to initiate structural reforms in agriculture so as to boost the one sector that drives the economy significantly. An increase in farm output directly translates into higher GDP growth & gives a boost to the economy. Considering the gloomy external environment, exports have nosedived and any meaningful uptick is unlikely given the depressed global scenario. Chinese yuan devaluation would severely affect Indian exports and the domestic economy. Cleaning up bank balance sheets should be priority given the fact that banks are a direct proxy to the growth in the economy. Recapitalising banks by utilising the funds saved in oil import bill might be a sensible option. Even though the global oil price has fallen precipitously, Indian retail prices have not fallen in tandem. Increased levies by the Central Govt. has enriched the Govt. coffers. Hence, one might have to wait for the second half of the year to witness any meaningful uptick in the economy. Till then, one can expect the Budget to lay emphasis on macros & superficial sops. The domestic defence industry is one area which is likely to witness increased focus & activity besides agriculture.

Evening,
it is hardly surprising to see those figures to be honest. With the production costs ( including financial costs ) high and high central and state tax slabs, manufacturing was bound to take a hit. While reforms anticipated will start the growth wheel again, what will accelerate growth is labor reforms. With hardly any spare cash, Local consumption will grow at a slower rate not inspiring confidence amongst manufacturers. Why would a manufacturer want to expand his capacity when revenue and profitability are not growing. You cannot have free market and low wages and expect accelerated growth because local consumption is going no where.

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